Retailers among companies with highest customer switch rates
NEW YORK — Despite having more data and insights into consumer desires and preferences, companies in the United States have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers. As a result, there is a potential $1.3 trillion of revenue at play in the U.S. market represented by the ‘switching economy’, according to new research released by Accenture.
The research revealed that 51% of U.S. consumers switched service providers in the past year due to poor customer service experiences, up 5% from 2012. Switching rates were highest among retailers, cable and satellite providers and retail banks, making companies in these sectors the most vulnerable, but also giving them potentially the most to gain.
The survey found that customers are increasingly frustrated with the level of services they experience: 91% of respondents are frustrated that they have to contact a company multiple times for the same reason; 90% by being put on hold for a long time; and 89% by having to repeat their issue to multiple representatives. There are also frustrations with marketing and sales practices: 85% of customers are frustrated by dealing with a company that does not make it easy to do business with them; 84% by companies promising one thing, but delivering another; and 58% are frustrated with inconsistent experiences from channel to channel.
Other findings include:
- Overall customer satisfaction fell by 1% since 2012, while customer loyalty rose 1% and willingness to recommend a company rose 2%.
- 81% of customers who switched providers in the past year said the company could have done something differently to prevent them from switching, with customer service equally important as price.
- 48% of U.S. customers use third-party online sources, such as official review sites, and 25% use customer reviews and comments from social media sites, to find out information about a company’s products and services.
- 71% of customers use word-of-mouth.
- 75% of respondents now use one or more online channels when researching companies’ products and services, and 33% use mobile devices to access these online channels.
- 82% of customers say they feel companies they buy from cannot be trusted on how they use personal information provided to them.
“Changing customer behaviors in the digital marketplace and low levels of customer satisfaction are fueling a switching economy that presents opportunities as well as threats. But too many companies are playing not to lose instead of playing to win in this switching economy,” said Robert Wollan, global managing director at Accenture Sales and Customer Services. “Growth is harder to come by in many sectors but the switching economy presents a source of new, sustainable, profitable growth for companies that are playing to win and gain marketshare. To win requires an aggressive approach that goes beyond implementing technology to creating genuinely engaging customer experiences that today’s nonstop customers are seeking but obviously not finding with their current providers.”
ARG: Economic hardships to influence holiday shopping
CHARLESTON, S.C. — One-third (33%) of U.S. families are making less money as a result of job loss, moving to a part-time job and/or working at a lower-paying job.
In addition, according to three recent consumer surveys from America’s Research Group, 40% of parents are trying to save as much money as they can for their children’s college education, 38% of families did not take a vacation this year of four days or longer, and 44% of parents will do most of their back-to-school apparel shopping in December when the deals are better.
"All these things are going to affect Christmas shopping,” said Britt Beemer, chairman and CEO of ARG. “What is going to happen this year is going to be that families are not going to be able to have anything extra to splurge on and that’s the issue. Last year, 38% of adults did not buy gifts for each other, that number will likely be higher this year.”
The ARG research consisted of three national surveys: one conducted the first weekend in October; a back-to-school shopping survey conducted the second week in July; and the survey conducted the weekend after Labor Day weekend.
Deloitte: Holiday spending up despite gloomy forecasts
NEW YORK — Despite many forecasts of a gloomy holiday season for retailers, Deloitte is predicting an increase in consumer spending. Deloitte’s 28th annual survey of holiday spending intentions and trends indicates shoppers surveyed plan to spend an average of $421 on holiday gifts this year, up from $386 last year. They also expect to buy an average of 12.9 gifts, ending a five-year decline in the number of gifts they plan to purchase.
The amount consumers plan to spend on non-gift items for themselves or their families rose 14% from 2012, while spending on home and holiday furnishings jumped 25% from last year. In addition, 54% of consumers believe the economy is on the rebound, an increase of 22 percentage points in the past two years.
The Internet moved into the top spot among holiday shopping destinations for the first time in its 15 years represented in the survey, bumping discount/value department stores from the No. 1 position. Nearly half (47%) of consumers plan to purchase items online, followed by 44% at discount/value stores. More than three-quarters (76%) of consumers cite convenience as a reason for shopping online, followed by price (63%).
The omnichannel shopper is most likely to make retailers’ spirits bright. Those who shop a combination of store, Internet and mobile channels plan to spend a total of $1,643 on the holidays, 76% higher than those who shop in the store only. Nearly 8-in-10 (77%) consumers say that if a product is not available on a store’s website, they will go elsewhere, while only 13% would go to that same retailer’s store. In addition, 45% of all respondents indicate they would switch to an entirely different store chain or website if they can’t find the desired item in a retailer’s store.
Other findings include:
- Nearly three-quarters (73%) of consumers say their holiday spending will be influenced by coupons or promotional offers.
- More than 7-in-10 (71%) say they plan to take advantage of free shipping offers, while nearly half (47%) expect free returns. More than 4-in-10 (44%) shoppers intend to take retailers up on price-matching guarantees, 36% will shop extended hours and 35% plan to order online for in-store pickup.
- Retailers also may have good reason to roll out the promotions early this year: The number of consumers who say they expect to complete the majority of their shopping by early November (30%) rose five percentage points from last year. One-quarter (25%) of consumers plan to shop on Black Friday, and 24% plan to do so on Cyber Monday. Forty-five percent indicate that Black Friday isn’t as important as it used to be.
"The survey reveals a brighter consumer spending outlook than we’ve seen in several years," said Alison Paul, vice chairman, Deloitte LLP, and retail and distribution sector leader. "Consumers are feeling more generous about gift spending, and we are encouraged by their plans to spend more on going out for celebrations, decorating their homes and treating themselves and their families to ‘early gifts’ while holiday shopping this year. The government shutdown and debt crisis had the potential to dampen consumer sentiment; however, the settlement likely averted any significant impact on the holiday season. The timely resolution of those issues may also give consumers an extra confidence boost just as promotions start hitting the stores and the shopping season gets underway."